The Global Opportunity Index 2025 places Mexico behind Chile, Uruguay, and Costa Rica regarding foreign direct investment attractiveness. Mexico maintains regional significance, and its ranking exposes its advantages and challenges within the global investment environment.
The Global Opportunity Index 2025 from the Milken Institute identifies Mexico as the fourth most appealing economy for foreign investors in Latin America. The nation’s extensive trade agreements give it prominence for trade openness, yet investor confidence suffers from persistent security and governance concerns. Despite facing several challenges, Mexico is one of Latin America’s top investment destinations for businesses to access North American markets.
Strengths Driving Mexico’s Investment Appeal
The report shows that 48.9% of foreign direct investment (FDI) for emerging and developing economies flowed to Latin America and the Caribbean in 2023. Mexico stands out as one of the top beneficiaries of this trend because of its strategic location and commercial ties with the United States and Canada under the USMCA. The research shows how Mexico draws investments in essential sectors, including automotive manufacturing and semiconductor production. Mexico has reinforced its role as a nearshoring destination by attracting companies that want to move production operations nearer North American markets.
Mexico’s business environment is supported by a vast network of free trade agreements that enable investors to enter multiple international markets. Mexico maintains over 14 trade agreements with over 50 countries, including crucial markets like the European Union, Japan, and Latin American regions. Mexico’s extensive trade network bridges businesses that want to expand globally while maintaining cost-effective operational standards. The trade agreements establish Mexico as one of Latin America’s top investment destinations in Latin America for companies seeking a platform that supports diversified exporting opportunities.
The skilled labor force in Mexico is another vital element that enhances its appeal to businesses. The Milken Institute report reveals Mexico’s growing number of STEM graduates and its leading position in technical education compared to some Asian economies. The increase in educated professionals has strengthened aerospace, IT services, and high-value manufacturing sectors, boosting investor trust.
Challenges Impacting Investment
Despite its many advantages, Mexico’s investment appeal encounters obstacles. Investors consider security a significant concern because organized crime and infrastructure risks impact supply chain operations in certain regions. Due to bureaucratic inefficiencies and unpredictable regulatory conditions, foreign businesses have become more cautious about expanding in Mexico.
Mexico remains lower on the index because of institutional weaknesses and rule-of-law concerns. Although Mexico has substantially improved its regulatory systems, contract enforcement problems, legal transparency deficiencies, and corruption continue to hinder long-term investment projects.
Political instability remains a significant influence on investor sentiment. Government interventions and policy changes in critical industries, including energy, generate doubts about regulatory consistency. Market stability and investor confidence suffered due to policy reversals faced by foreign firms operating within the renewable energy and hydrocarbon sectors. Mexico’s fundamental economic strength is its status as a top investment destination in Latin America, specifically for industrial and export-oriented businesses.
Mexico’s Global Ranking and Regional Position
According to the Global Opportunity Index 2025, Mexico ranks 62nd among 116 evaluated countries worldwide. The index evaluates the performance of economies across five major areas: It evaluates economies based on business perception and economic fundamentals while also considering financial services institutional frameworks and international norms and policies.
Mexico maintains consistent performance across multiple sectors, placing it between 61st and 65th in rankings and indicating a trustworthy and balanced business climate compared to neighboring economies. The current ranking shows that additional reforms are essential to build investor trust and maintain long-term financial stability.
Latin America’s Top Investment Destinations
The Global Opportunity Index 2025 lists Chile as the top destination for foreign investment capital in Latin America, followed by Uruguay and Costa Rica. The other top investment destinations in Latin America are:
- Mexico
- Peru
- Brazil
- Colombia
- Panama
- Dominican Republic
Political stability, strong institutional frameworks, and lower perceived risk make Chile, Uruguay, and Costa Rica rank above Mexico as desirable investment destinations in Latin America. These nations maintain high FDI inflows because of their welcoming investment policies, effective governmental operations, and supportive business regulations.
Expert Insights on Mexico’s Investment Landscape
Maggie Switek from Milken Institute states that Mexico’s numerous trade agreements, such as the USMCA, and accords with Europe and Asian nations like Japan make it an attractive destination for international capital. According to her analysis, Mexico’s most potent competitive edge is its labor force.
According to Switek, the country has significantly increased its number of STEM field graduates in recent years to above that of some Asian nations. The focus on education and workforce development has established Mexico as an essential participant in sectors that demand high-skilled workers, such as artificial intelligence, data analytics, and biotechnology.
Future Outlook for Investment in Mexico
A sustained focus on structural issues will enable Mexico to establish itself as a prime investment location in the future. The sustainability of foreign capital inflows depends critically on strengthening legal governance, improving security conditions, and enhancing investment in infrastructure.
Companies continue to relocate operations near North America to Mexico to benefit from its low-cost labor force while reducing supply chain disruptions. The steady growth of fintech and e-commerce sectors in the digital transformation era creates fresh investment possibilities for those who want to take advantage of the country’s shifting business environment.
Mexico’s investment environment contains challenges, but its strategic location, skilled workforce, and extensive trade partnerships create a solid foundation for growth. Mexico’s economic standing and security improvements through policy implementation will help it maintain foreign investment interests and secure its position as one of the leading investment destinations in Latin America.